Editing Greenback Party (section)

==Organizational history==

===Background===

[[File:Greenback-1862.jpg|thumb|right|320px|A $5 United States Note of the series of 1862 popularly known as a "greenback" from the color of ink used on the reverse]]

The [[American Civil War]] of 1861 to 1865 greatly affected the financial system of the United States of America, creating vast new war-related expenditures while disrupting the flow of tax revenue from the [[Southern United States]], organized as the [[Confederate States of America]]. The act of Southern secession prompted a brief and severe [[recession|business panic]] in the North and a crisis of public confidence in the Federal government.<ref name=Kleppner1552>Paul Kleppner, "The Greenback and Prohibition Parties," in Arthur M. Schlesinger (ed.), ''History of U.S. Political Parties: Volume II, 1860-1910, The Gilded Age of Politics.'' New York: Chelsea House/R.R. Bowker Co., 1973; pg. 1552.</ref> The government's initial illusions of a quick military victory proved ephemeral and in the wake of Southern victories the federal government found it increasingly difficult to sell the government bonds necessary to finance the war effort.<ref name=Kleppner1552 />

Two 1861 bond sales of $50 million each conducted through private banks went without a hitch, but bankers found the market for the 7.3% securities soft for a third bond issue.<ref name=Kleppner1552 /> A general fear arose that the country's [[gold]] supply was inadequate and that the nation would soon leave the [[gold standard]].<ref name=Kleppner1552 /> In December [[bank run|runs on deposits]] began in [[New York City]], forcing banks there to disburse a substantial part of their hard metal reserves.<ref name=Kleppner1552 /> On December 30, 1861, New York banks suspended the redemption of their banknotes with gold.<ref name=Kleppner1552 /> This spontaneous action was followed shortly by banks in other states suspending payment on their own banknotes and the [[United States Treasury|U.S. Treasury]] itself suspending redemption of its own [[United States Treasury security#Treasury note|Treasury notes]].<ref name=Kleppner1552 /> The gold standard was thus effectively suspended.<ref name=Kleppner1552 />

[[United States Secretary of the Treasury]] [[Salmon P. Chase]] had already anticipated the coming financial crisis, proposing to [[United States Congress|Congress]] the establishment of a system of national banks, each empowered to issue banknotes backed not with gold but with federal bonds.<ref name=Kleppner1552 /> This December 1861 proposal was initially ignored by Congress, which in February 1862 decided instead to pass the [[First Legal Tender Act]], authorizing the production of not more than $150 million of these legal tender [[United States Note]]s.<ref name=Kleppner1552 /> Two additional issues were deemed necessary, approved in June 1862 and January 1863, so that by the end of the war some $450 million of this non-gold-backed currency was in circulation.<ref name=Kleppner1552 />

The new United States Notes were popularly known as "greenbacks" due to the vibrant green ink used on the reverse side of the bill. A dual currency system emerged in which this [[fiat money]] circulated side by side with ostensibly gold-backed currency and gold coin, with the value of the former bearing a discount in trade. The greatest differential in value of these currencies came in 1864, when the value of a gold dollar equaled $1.85 in greenback currency.<ref name=Kleppner1553>Kleppner, "The Greenback and Prohibition Parties," pg. 1553.</ref>

[[File:Mathew Brady, Portrait of Secretary of the Treasury Salmon P. Chase, officer of the United States government (1860–1865).jpg|thumb|right|220px|[[Salmon P. Chase]], Abraham Lincoln's Secretary of the Treasury, was a leading exponent of so-called "greenback" currency during the American Civil War]]

Congress finally enacted Treasury Secretary Chase's [[National Bank Act|National Bank plan]] in January 1863, creating a yet another form of currency, also backed by government bonds rather than gold and redeemable in United States Notes.<ref>Kleppner, "The Greenback and Prohibition Parties," pp. 1552-1553.</ref> This non-gold-based currency became the functional equivalent of greenbacks in circulation, further expanding the money supply.<ref name=Kleppner1553 />

With the production of consumer goods impacted by the conversion of factories to wartime production and the expansion of the money supply, the United States of America experienced a period of protracted [[inflation]] during the Civil War.<ref name=Kleppner1553 /> Between the years 1860 and 1865, the cost of living nearly doubled.<ref name=Kleppner1553 /> As is the case in all inflationary periods, there were winners and losers created by the significant fall in currency value, with banks and creditors receiving less real value from the loans repaid by debtors. Pressure began to build in the financial industry for a rectification of the weak currency situation.

A change of heads at the Treasury Department in March 1865 proved the occasion for a change of course in American monetary policy. New Secretary of the Treasury [[Hugh McCulloch]] not only declared himself sympathetic to the banking industry's desire for restoration of a gold-based currency, but he declared the resumption of gold payments to be his primary aim.<ref name=Kleppner1553 /> In December 1865, McCulloch formally sought approval from Congress to retire the greenback currency from circulation, a necessary first step towards restoration of the gold standard.<ref name=Kleppner1553 /> In response, Congress passed the [[Contraction Act of 1866]], calling for the withdrawal of $10 million in United States Notes within the first 6 months and an addition $4 million per month thereafter.<ref name=Kleppner1553 /> Substantial contraction of the physical money supply followed.<ref name=Kleppner1553 />

About $44 million in greenback currency was successfully withdrawn from circulation before a [[recession]] in 1867 helped fuel opposition in Congress to the deflationary redemption program.<ref name=Kleppner1553 /> In February 1868, Congress terminated the Redemption Act and a state of what is today known as [[gridlock (politics)|gridlock]] emerged, during which Congress refused to either formally leave the gold standard or to redeem its non-gold currency in circulation.<ref name=Kleppner1553 /> Secretary of the Treasury of the [[Ulysses S. Grant|Grant administration]] [[George S. Boutwell]] formally abandoned the contraction policy and embraced the ongoing state of political inertia.<ref name=Kleppner1553 />

Currency policy emerged as a hot topic in national politics, with politically active [[farmer]]s and representatives of the fledgling national [[trade union]] movement endorsing a weak greenback-type currency as conducive to the needs of these groups as debtors.<ref name=Kleppner1554>Kleppner, "The Greenback and Prohibition Parties," pg. 1554.</ref> A looser currency supply was seen as a way of breaking the perceived stranglehold on the national economy held by banks and wealthy industrialists.<ref name=Kleppner1554 /> Chief among these supporters of so-called "Greenbackism" was the [[National Labor Union]] (NLU), established in 1866.<ref name=Kleppner1554 /> This and other groups began to turn to [[political action]] in 1870 in an effort to advance their political agenda, with an August 1870 convention calling for the establishment of the [[National Labor Reform Party]].<ref name=Kleppner1554 />

Joining organized labor were the organized farmers in the form of the [[The National Grange of the Order of Patrons of Husbandry|Patrons of Husbandry]], commonly known as [[National Grange of the Order of Patrons of Husbandry|the Grange]].<ref name=Kleppner1555>Kleppner, "The Greenback and Prohibition Parties," pg. 1555.</ref> Established in 1867, the Grange concerned itself with the [[monopoly]] power exerted by railroads, which used various aggressive pricing mechanisms for its own benefit against the farmers who shipped commodities over its lines. When the Grangers turned to politics around the start of the 1870s, railroad price reform was chief on its agenda, with currency reform making it easier for debtors to repay their loans a distinctly lesser concern.<ref name=Kleppner1555 />

The Greenback Party would be an alliance of organized labor and reform-minded farmers intent on toppling the political hegemony of the industrial- and banking-oriented [[Republican Party (United States)|Republican Party]] which ruled the North during the [[Reconstruction Era of the United States|Reconstruction period]].

===1873 economic crisis and response===

{{main|Long Depression}}

[[File:Panic of 1873 bank run.jpg|thumb|right|270px|Contemporary news illustration of a run on the 4th National Bank of New York during the [[Panic of 1873]]]]

The late 1860s and early 1870s were a time of frenetic railway construction and associated land speculation. Rather than a managed system of national railroad construction through [[public works]] or leaving the construction of lines strictly to market forces, Congress attempted to spur the growth of the industry through the grant of enormous tracts of [[public land]]s to privately owned railway companies. In May 1869, the [[First transcontinental railroad]] across the North American continent was completed, bringing many localities to within reach of a national market for the first time.

A frenzy to complete additional railway lines to open up new frontier areas for development followed, a situation in which the United States government and the great railroad companies of the day maintained a common interest. In an effort to speed such development, Congress granted cash loans and some 129 million acres (52.2 million hectares) of publicly owned land to subsidize construction.<ref name=Hicks3>John D. Hicks, ''The Populist Revolt: A History of the Crusade for Farm Relief.'' Minneapolis, MN: University of Minnesota Press, 1931; pp. 3-4.</ref>

A great part of this massive stockpile of land needed to be converted into cash by the railways to finance their building activities, since railroad construction was a costly undertaking. New settlement had to be attracted to the virgin lands west of the [[Missouri River]], which had been previously regarded by the public as worthless to the needs of agriculture due to insufficiencies of the soil as well as the arid climate.<ref>Hicks, ''The Populist Revolt,'' pg. 5.</ref> Millions of advertising dollars were spent by the railway companies promoting the agricultural development of the land which they had to sell.<ref name=Hicks15>Hicks, ''The Populist Revolt,'' pg. 15.</ref> Populations skyrocketed and marginal lands were sold and settled.

In 1873, the [[economic bubble]] burst. [[Panic of 1873|The Panic]] began with a crisis in the overextended railroad industry, when the brokerage house [[Jay Cooke & Company]] found itself unable to sell enough [[Northern Pacific Railroad]] bonds to meet its financial obligations, leading to a default on loans and setting off a financial chain reaction. Runs began on banks, causing a series of bank failures, and manufacturers shuttered their production, laying off workers. Dozens of marginal railroads went bankrupt while unemployment skyrocketed.<ref>There were a total of 105 American railroad failures during the first year of the crisis. See: Kleppner, "The Greenback and Prohibition Parties," pg. 1556.</ref> A lengthy depression ensued, continuing through 1878.<ref name=Kleppner1555-1556>Kleppner, "The Greenback and Prohibition Parties," pp. 1555-1556.</ref>

Pressure was placed on Congress to alleviate the business crisis through reinflation of the currency, pitting railroad promoters and the iron industry against Eastern bankers and the merchant elite, who favored a stable, gold-based currency.<ref name=Kleppner1556>Kleppner, "The Greenback and Prohibition Parties," pp. 1556.</ref> Although those favoring currency expansion won the day in Congress, which passed an Inflation Bill calling for a $46 million boost in output of National Bank notes that would raise the ceiling on unbacked currency back to $400 million, the legislation was [[veto]]ed by President Grant on April 22, 1874.<ref name=Kleppner1556 />

The next Congress moved in the other direction, with the Republican leadership making use of steamroller tactics in order to finally resolve the dual currency situation through passage of the [[Specie Payment Resumption Act]].<ref name=Kleppner1557>Kleppner, "The Greenback and Prohibition Parties," pg. 1557.</ref> Under the plan the government would accumulate a sufficient gold reserve over the next several years through the sale of interest-bearing bonds for gold, using the accumulated metal to redeem the greenback currency on January 1, 1879.<ref name=Kleppner1557 /> This deflationary move further tightened the already contracting economy, moving currency reform higher on the list of objectives of politically minded farmers.<ref name=Kleppner1557 />

With the [[Democratic Party (United States)|Democratic Party]] still discredited in the minds of many Northerners for its pro-Southern orientation and the Republican Party dominated by pro-gold interests, conditions had become ripe for the emergence of a new political organization to challenge the political hegemony of the two established parties of American politics.

===Establishment===

[[File:Peter Cooper Photograph.jpg|thumb|right|200px|[[Peter Cooper]] of New York, presidential candidate of the Greenback Party.]]

The Greenback Party emerged gradually from the consolidation of like-minded  [[federated state|state]]-level political organizations of differing names. According to historian [[Paul Kleppner]], the origin of the Greenback Party is to be found in the state of [[Indiana]], where early in 1873 a group of reform-minded farmers and [[political activist]]s declared themselves free of the two established parties and established themselves as the Independent Party.<ref name=Kleppner1557 /> One of the founding members, John C. Wilde, is cited several times in a northern Michigan newspaper from 1898 explaining the reasons for the beginning of the Party. The group nominated a slate for statewide office, running on a platform which called for expansion of the national currency.<ref name=Kleppner1557 /> (In [[Wisconsin]] in the same year, a short-lived [[Reform Party (19th century Wisconsin)|Reform Party]], also called Liberal Reform Party or People's Reform Party, a [[coalition]] of Democrats, [[reform]]-minded Republicans, and [[The National Grange of the Order of Patrons of Husbandry|Grangers]] secured the election of [[William Robert Taylor]] as [[List of Governors of Wisconsin|Governor of Wisconsin]] for a two-year term,<ref>{{Cite web |url=http://www.wisconsinhistory.org/dictionary/index.asp?action=view&term_id=2700&keyword=taylor |title=William Robert Taylor, Wisconsin Historical Society |access-date=2012-08-03 |archive-date=2018-10-01 |archive-url=https://web.archive.org/web/20181001142716/https://www.wisconsinhistory.org/dictionary/index.asp?action=view&term_id=2700&keyword=taylor |url-status=dead }}</ref> as well as a number of state legislators, but it never formed a coherent organization.)

The Indiana Independent organization cast its eyes upon a broader existence the following year, issuing a convention call in August 1874 urging all "greenback men" to assemble at [[Indianapolis]] in November to form a new national political party.<ref name=Kleppner1557 /> The result of this call was an undelegated gathering of individuals held in November in Indianapolis which was more akin to an organizational conference than a formal convention. No new party was formally established, but a governing Executive Committee was named for the prospective "National Independent Party", with the body assigned the task of composing a declaration of principles and issuing another call for a formal founding convention.<ref name=Kleppner1557 />

Several regional conventions took place in 1875, merging the activities of local political parties towards a single end.<ref>Philip S. Foner, ''History of the Labor Movement in the United States: Volume 1, From Colonial Times to the Founding of the American Federation of Labor.'' New York: International Publishers, 1947; pg. 476.</ref> Most of those attending these initial gatherings were farmers or lawyers, with few urban wage workers or trade union officials — the union movement having been shattered and atomized following the Panic of 1873.<ref>Foner,  ''History of the Labor Movement in the United States," vol. 1, pp. 476-477.</ref>

The party nominated its first national ticket at a convention held in [[Indianapolis]], [[Indiana]] in May 1876.<ref name=Kleppner1551>Kleppner, "The Greenback and Prohibition Parties," pg. 1551.</ref> The party's platform focused upon repeal of the [[Specie Resumption Act of 1875]] and the renewed use of non-gold-backed [[United States Note]]s in an effort to restore prosperity through an expanded [[money supply]].<ref name=Kleppner1551 /> The convention nominated New York economics pamphleteer [[Peter Cooper]] as its presidential standard-bearer.

Cooper declared to the convention:

{{blockquote|The paper currency, commonly called 'legal tenders' or 'greenbacks,' was actually paid out for value received as so much gold, when gold could not be obtained ...

But whether our currency will always be on a par with gold or not, ... the commercial and industrial prosperity of a country do not depend upon the amount of gold and silver there is in circulation. Our prosperity must continually depend upon the industry, the enterprise, and the busy internal trade and a true independence of foreign nations, which a paper circulation, well based on credit, has always been found to promote.<ref>Peter Cooper, [https://archive.org/details/nominationtopres00greerich ''The Nomination to the Presidency of Peter Cooper and his Address to the Indianapolis Convention of the National Independent Party.''] New York: Peter Cooper/Trow's Printing and Bookbinding, 1876; pg. 13.</ref>}}

The Greenback movement argued that the previous effort of using an unbacked currency had been sabotaged by monied interests, which had prevailed upon Congress to restrict the functionality of the notes — declaring them unsuitable for the payment of taxes or national debt.<ref name=Bliss>William D.P. Bliss and Rudolph M. Binder (eds.), ''The New Encyclopedia of Social Reform.'' New York: Funk and Wagnalls, 1908; pp. 562-563.</ref> This inevitably depreciated the value of the unbacked currency when circulated side by side with fully functional gold-backed notes, the Greenback movement argued.<ref name=Bliss /> Moreover, this differential in values was exploited by speculators, who purchased unbacked currency at a severe discount with gold-backed notes and then pressured Congress into redemption of the same at a 1-to-1 rate — thereby netting the speculator a tidy profit.<ref name=Bliss />

The Greenback Party of 1876 drew the support almost exclusively from farmers — few urban workmen cast ballots for the Greenback ticket.<ref name=Perlman240>Selig Perlman, "Upheaval and Reorganization (Since 1876)," in John Commons et al. (eds.), ''History of Labour in the United States: Volume 2.'' New York: Macmillan, 1918; pg. 240.</ref> The situation changed somewhat in the summer of 1877, however, when a strike movement erupted across the country, leading to the suppression of local [[strike actions]] by Federal troops and a radicalization of workers. A myriad of local political organizations, independent not only of the Republican and Democratic Parties but also of the fledgling Greenback Party sprung up around the country, concentrated in the states of [[Ohio]], [[Pennsylvania]], and [[New York state|New York]].<ref name=Perlman240 />

===Development===

[[File:James Weaver - Brady-Handy (cropped).jpg|thumb|right|200px|[[James B. Weaver]], presidential nominee of the Greenback Labor Party, was later a prominent figure in the [[Populist movement]].]]

In the late 1870s, the party controlled local government in a number of industrial and mining communities and contributed to the election of 21 members in the [[United States Congress]] independent of the two major parties.<ref name=Foner532>Foner, ''Give Me Liberty!'' vol. 2, pg. 532.</ref> The movement found particular success at the 1874 elections in Wisconsin, California, Iowa and Kansas.

This led the ''Chicago Weekly Tribune'' to state that the movement offered, "an opportunity to accomplish something for the country at large — not for the farmers merely, but for all who live by their industry, as distinguished from those who live by politics, speculations and class-legislation." Frustrated by their inability to get Democrats or Republicans to adopt inflationary monetary policy, southern and western leaders of monetary reform met in Indianapolis and proposed the creation of a new political party for currency reform. They would meet again in Cleveland to formally launch the Greenback Party in 1875. The Greenbackers condemned the [[Banking in the United States|National Banking System]], created by the [[National Banking Act]] of 1863, the harmonization of the silver dollar ([[Coinage Act of 1873]] was in fact the "Crime of '73" to Greenback), and the [[Resumption Act]] of 1875, which mandated that the U.S. Treasury issue specie (coinage or "hard" currency) in exchange for greenback currency upon its presentation for redemption beginning on January 1, 1879, thus returning the nation to the gold standard. Together, these measures created an inflexible currency controlled by banks rather than the federal government. Greenbacks contended that such a system favored creditors and industry to the detriment of farmers and laborers.<ref>Hild, ''Greenbacks, Knights of Labor, and Populists,'' pp. 20–21.</ref>

In 1880, the Greenback Party broadened its platform to include support for an [[income tax]], an [[eight-hour day]], and [[women's suffrage|allowing women the right to vote]]. Ideological similarities also existed between the Grange ([[The National Grange of the Order of Patrons of Husbandry]]) and the Greenback movement. For example, both the Grange and the GAP favored a national graduated income tax and proposed that [[public lands]] be given to settlers rather than sold to land [[speculators]].<ref name=Hild22>Hild, ''Greenback, Knights of Labor, and Populists,'' pg. 22.</ref> The town of [[Greenback, Tennessee]], was named after the Greenback Party about 1882.<ref>Linda Albert, "About Greenback", ''[[Maryville-Alcoa Daily Times]]'', February 19, 2000.</ref>

The party seems to have made use of slightly different official names in some states, with the organization appearing on the ballot in the November 1880 [[Sacramento]], [[California]] city election as the "Greenback Labor and Socialist Party".<ref>[https://www.newspapers.com/clip/6776221/greenback_labor_and_socialist_party/ "Greenback Socialists"], ''Sacramento Record-Union'', pg. 3.</ref>

Among its national spokesmen, although not the best known, was [[Thomas Ewing, Jr.]], a noted Free State advocate in Kansas before the civil war, a controversial major general of Union forces during the war, and a Republican turned Democrat after the Grant Administration. His national debates on Greenback monetary policy led the party's growth and influence as spokesmen against the post-war redevelopment of monopolistic gold-based capitalism. Ewing's advice to Andrew Johnson had helped point the administration towards an anti-gold-standard Treasury department.<ref>Ronald D. Smith, ''Thomas Ewing Jr.: Frontier Lawyer and Civil War General.'' Columbia, MO: University of Missouri Press, 2008; pg. 290.</ref>

Ewing served in Congress from 1877 to 1881 during the Hayes administration as a leading spokesman for those national politicians who wanted the nation's money supply used to expand commerce and fund westward expansion of the nation, not repay in gold the interest on civil war bonds Eastern bankers had bought to fund much of the civil war effort but whose antebellum lending practices to the South had helped slavery flourish.<ref>Smith, ''Thomas Ewing Jr.,'' pp. 331-332.</ref> His 1875 national debates with hard money New York Governor [[Stewart L. Woodford]] set the stage for a rapid but brief rise in party national influence.<ref>J.V. Lee (Ed.), [https://archive.org/details/jointdiscussion00woodgoog ''Joint Discussions between Gen. Thomas Ewing, of Ohio, and Gov. Stewart L. Woodford, of New York, on the Finance Question: Held at Circleville, Wilmington, Tifflin, and Columbus, Ohio, October 2, 4, 8, and 9, 1875.'']  Columbus, OH: J.V. Lee, 1876; pg. 100.</ref>

===Decline and dissolution===

[[File:Bfbutler.jpg|left| thumb|Representative [[Benjamin Butler (politician)|Benjamin F. Butler]] of Massachusetts was the Greenback nominee for president in 1884]]

The Greenback Party was in decline throughout the entire [[Grover Cleveland]] administration. In the [[United States House of Representatives elections, 1884|election of 1884]], the party failed to win any [[United States House of Representatives|House]] seats outright, although they did win one seat in conjunction with Plains States Democrats, [[James B. Weaver]], as well as a handful of other seats by endorsing the Democratic nominee.

In the [[United States House of Representatives elections, 1886|election of 1886]], only two dozen Greenback candidates ran for the House, apart from another six who ran on fusion tickets. Again, Weaver was the party's only victory. Much of the Greenback news in early 1888 took place in Michigan, where the party remained active.

In early 1888, it was not clear if the Greenback Party would hold another national convention. The 4th Greenback Party National Convention assembled in [[Cincinnati]], [[Ohio]], on May 16, 1888. There were so few delegates who attended that no actions were taken. On August 16, 1888, [[George O. Jones]], chairman of the national committee, called a second session of the national convention. The second session of the national convention met in Cincinnati on September 12, 1888. Only seven delegates attended. Chairman Jones issued an address criticizing the two major parties, and the delegates made no nominations. With the failure of the convention, the Greenback Party ceased to exist.

===Legacy===

Many Greenback activists, including 1880 Presidential nominee [[James B. Weaver]], later participated in the [[Populist Party (United States)|Populist Party]]. By the middle of the 1880s, Greenback Labor nationally was losing its labor-based support, in part as a result of [[craft union]] voluntarism and in part as a result of Irish defections back to the Democratic Party.<ref>Gwendolyn Mink, ''Old Labor and New Immigrants in American Political Development; Union, Party, and State, 1875-1920.'' Ithaca, NY: Cornell University Press, 1986; pg. 87.</ref>

Historian [[Paul Kleppner]] has observed that one of the traditional functions of [[Third party (United States)|third parties]] in the American political system has been the raising of new issues, the testing of their viability amongst the electorate, and the pressuring of established political parties to appropriate these issues as part of their own electoral agenda.<ref>Kleppner, "The Greenback and Prohibition Parties," pg. 1550.</ref> In this the Greenback Party and the People's Party which followed it were ultimately successful, moving the Democratic Party to espouse looser monetary policy and an ultimate abandonment of the gold standard.